Flight Students Need Protection

The sky falls just about every day here at AVweb and, frankly, you get used to it. It doesn't seem to take much. Adjust the regulations or the laws a little and the e-mail pours in.

Sometimes the matter in question is so patently ridiculous that we jump on it. The inability of the FAA and the FCC to get together on the future of ELTs got that reaction from us but still we didn't don our hardhats.

The truth is folks tend to hit the panic button a little too easily in this Internet age so we at AVweb try to dig a little and make sure the hole is actually there before we get out the Kevlar.

So, when some California flight schools sounded the alarm earlier this year about fees and inspections and extra paperwork, we dutifully took a look, ran a story and explained that flight schools are now expected to behave like any other private educational facility and provide some assurance that the student gets what he or she pays for.

Stop, right now. Think about this for a second. Yes, aviation is different and yes we do things differently — but when was the last time you paid 100 percent up front for something that would take at least a year to deliver and was dependent on your own skills to achieve full value?

Don't get me wrong. We were on the bandwagon and suitably noisy about this "threat to aviation," but then I chanced on a submission by the guy who keeps Jet University Sucks going and his was the lone voice in favor of the new law. As we reported in January, a tangled mess of alleged improprieties closed the Florida school, which was purportedly training kids for right seat jobs at regional. They'd paid up and are now out whatever they didn't get in dollars vs. training.

Jet U guy told the California hearings into the new law that he found $36 million in lost fees paid in good faith by people in California with the dream to fly for a living. That may be part of about $200 million lost by students who'd put their faith in Silver State Helicopters and were left without a place to turn when the chain of schools went under in 2007.

What's amazing is that a lot of the affected students are probably flipping burgers and, if they're lucky, instructing or flying skydivers to build the money and time needed to meet the basic requirements of a job which often pays less than an entry level retail position.

Yes, the vast majority of schools and instructors are honorable and would never do this. However, since there doesn't seem to be any self policing on the business practices of schools (we have oversight on curriculum and training standards out the Wazoo), what choice do governments have but to ensure there is some protection against the horrifying treatment some of these students are enduring in an industry that has paradoxically, demanded so much respect?

The financial implications of California's law amount to about 500 hours in an engine account. The security the law may provide could help direct students to California schools confident in the knowledge they will get the training they pay for or they'll get their money back.

If we're trying to attract young people to aviation, the very least we should offer them is the assurance of honesty, integrity and values in training we will expect of them as pilots.

Comments (33)

The financial implications of the California proposal are unacceptable for small flight training operations. I could possibly understand the requirement if a school wanted to accept funds in advance, say over $5000 per student. If a school doesn't want to register and pay the fee, the funds could be held by a bank in an escrow account and released as the training is received.
If this proposal is enacted as written, you will see lots of vacant flight schools in California as they move their operations out of state.

The problem is that the way the law is written, it affects anyone teaching anything from the local Yoga instructor and high school student math tutor upwards. A lone freelance flight instructor cannot possibly be expected to deal with the thousands of dollars in fees and insane paperwork that invariably accompanies kinds of regulations. And yes, it is thousands of dollars - go read the bill. Most freelance instructors I know seem to shrug it off with a vague "Oh, it doesn't affect me, I am not a school as such." If you teach anything post-secondary schooling, this affects YOU. Some will claim the exemption clause that deals with "non-vocational" training will cover them for Private Pilot training - oh yeah? - Can you guarantee that person will not eventually go for their commercial? So your 'recreational' only training can be construed as a stepping stone for 'vocational' training and that will $5000 up front, if you please, sir, to be followed by further taxes - sorry, fees.

Several years ago the Pilot Career Foundation, a non-profit organization, offered student loans to it's members schools. For safety, and to keep both the flight school and student honest, they developed a proprietary debit card. Instead of giving the school the complete loan amount and then the student working the amount off. The student would pay, using the debit card, as the instruction was delivered. This gave the school immediate payment for services rendered and kept the loan secure from abuse by the student or the school. If the school goes out of business, it does not take the students loan with them. If I were a student loan organization, that is how I would offer my student loans.

Clearly California, and other States have a right to institute consumer protection measures and I encourage Flight Schools to work with the Bureau of Private Postsecondary Education (BPPE) to develop a workable solution. It is however short sighted to only look at the BPPE fees and fines as the issue. The documentation, inspection, and reporting requirement are far more burdensome than the monetary charges. We should work towards getting the BPPE to accept FAA oversight of the content, and method of instruction.

Playing the devil here, who in their right mind would pay up front for anything these days? Especially for flight training. A ten hour block time payment is a whole lot different than the entire tuition upfront. Seems a little common sense is lacking here.

The comments on "paying up front" are well taken. For Part 141 schools teaching foreign students, however, my understanding is that they cannot get a Visa without having pre-paid, ant the schools can't risk having a student show up without the ability to pay for the course.

I have no issue with solving this problem; it's an unfair business model to have the students poised as up-front investors in the business. But the solution is a classic sledge-hammer that causes more harm than it does good. There are certainly other solutions which can address the issue in a less draconian fashion. But, this IS California we're talking about... and I'll leave it at that.

There seems to be no argument, by even those with the largest new regulatory compliance burden, that there is a need for government intervention. So the discussion becomes how to prevent the hunt for the perfect killing the good. What small business can legitimately object to is the government’s approach: this one-size-fits-all solution is the bane of our small business’ existence. The agencies charged with promulgating regulations start with the intent of protecting the public from the worst offenders; the worst offenders have already been removed by free market forces. So those regulations intended to prevent their resurgence unintentionally affect the viability of remaining providers.
What is lacking from the regulators’ debates is the common sense found at this, the AvWeb blog level. There must be triggers that protect the legitimate operators who have always charged only for what has been delivered, as there must be new rules that protect unsuspecting students from for-profit institutions, clearly identifiable through historically available data. So why can’t this approach work? Simple: the rule makers can’t hear from us because their time is monopolized by special interests lobbyists whose fulltime job is to keep their thumb on the scale for their clients. I’m sending the link to this blog to my elected officials right now.

I'm not sure what regulation would work. Don't give your money up front to a business that could go bankrupt, because if they do you lose it. Since any business could go bankrupt - especially in aviation - don't give them money up front.

It's a bad idea even if they don't go bankrupt. Once they have your money what's your recourse if you don't get the service you expect?

Has anyone paid for a 4 yr (or more) college education in full up front? I've never heard of that - and why is aviation different?

I have a Commercial certificate, IFR rated, with 1100 hours. I've never attended a 'flight school' per se, but I've obviously received a lot of instruction, all from individual instructors. I've paid my instructors directly for their time at the end of each lesson. If those individuals have to register and pay fees and keep paperwork, they simple won't be available to me. I'll get less training.

There are numerous provisions in the California law that make it extremely difficult for flight schools and flight instructors to stay in business. One is that you cannot teach in a California Private Postsecondary School (meaning a flight school) without three-years experience. Think what that does for the "flow" of instructor into and out of the pipeline. Another is that a business must maintain a 1:1 debt to equity ratio. You must be completely solvent at all times, no debt over and above assets. Tell me how that works for a business.

Let's get real! Government regulation has never been the answer! History has proven that 9 out of 10 times! Anyone who pays for a repeating service up-front knows the risks! Unless your an idiot! I do not feel sorry for the students, they knowingly took the risk! I do not know any flight school that will not allow you to pay as you utilize services. I understand paying ahead for ground school or flight exams, but not flight instruction. The world is littered with flight schools that have worked that scam! Shame on the Chinese Students and/or whom ever they were sponsored by!

Well, I do feel sorry for the students. They are fairly young guys after all, maybe not so aviation wise (aka cynical) yet and chasing a dream. But, if the money really was raised "through family and friends" as the article describes you have to wonder why some older & wiser family with a sober look didn't realize what a bad idea it was.

Anyway these business that scam them, whether intentionally or not are really the worst type of people. I'm sure I would have been an easy mark when I started on my license, at 15. Fortunately my instructor was a great guy. If I had to endure the average fbos/flight schools experience I've encountered since then I probably would never have gotten a license.

I like Ed Rosiak and Marc Santacroce. The only guys telling it the way it is. Here is an example;

"We are going to have to fight to get the exemption reinstated for flight schools and flight instructors. There are a few reasons for this:
1. The state bureaucracies are (rightfully) worried about funding to maintain their jobs.
2. The legislature’s ratings are at all time lows, and it wants to appear to be doing something for the citizens. It is past time that aviation stood up for itself and its rights. In order to be successful, you need to be involved. It’s up to you – please do your part and join us in this fight."
Ed Rosiak – President
California Pilots Association

Marc Santacroce is spending his money to benefit other flight schools and CFIs. Visit www.flightfix.com and see his work.

I am an old CFI doing my part to let young CFIs have a chance in this California mess. We need to pull together. Reinstate the flight training exemption permanently - period.

...and further, Mr. Niles, AB48 is an irresponsible bill affecting thousands of CFIs and the flight instruction infrastructure of California. Flight students are not alone and they deserve to be protected however California’s CFIs deserve protection as well. This is a legislative blunder as it pertains to flight instruction, make no mistake about it, it will crash the industry. Your article needs to focus more on eliminating this very destructive force rather than publishing shabby read to spice a column. California CFIs need help – please make a serious effort to support us.

Regardless of where you stand on this issue, time is running short. Pending legislation (AB 1889 and AB 1140-bills that delay implementation of the law and call for public hearings) must come out of committee by August 13 to meet the deadline to get on the agenda for a floor vote before the end of this legislative session on August 31. Write your representatives and ask them to support AB 1889 and AB 1140 (or not) And do it NOW.

The flight school I work for was on the receiving end of the opposite. Along with 2 other local schools, we did flight training for a local state college. A "shiny jet school" with "guaranteed interviews" offered to take over the program provided they got all of the students. Come fall, we had no students and were left holding the bag for thousands of dollars for training given and never paid for. One of the local flight schools closed the doors.

The pilot mill pulled out of the program after a few years and we got some students back. Now, we require they carry a positive balance on their accounts.

I'd say let the free market decide which schools survive based on their business practices, but flight school selection by the kids with "shiny jet syndrome" makes little sense, business or otherwise.

A lot of comments here. But the very first one (Josh Johnson) nailed the problem. They use this exact method, for this exact reason in at least one small flight training school place, in New Zealand. It's called a Trust fund there. It simply guarantees that the students get what they pay for and the training provider can't misuse their money. Keep Big Brother (a.k.a Arny of Californ-I-AY) out of the whole deal.

Support AB 1140 Today; Bill To Be Considered This Monday Aug. 9, 2010! Go to the NATA (National Air Transportation Association) for details on preserving California's flight instructional infrastructure.

Let's get real! Government regulation has never been the answer! History has proven that 9 out of 10 times! Anyone who pays for a repeating service up-front knows the risks! Unless your an idiot! I do not feel sorry for the students, they knowingly took the risk! I do not know any flight school that will not allow you to pay as you utilize services. I understand paying ahead for ground school or flight exams, but not flight instruction. The world is littered with flight schools that have worked that scam! Shame on the Chinese Students and/or whom ever they were sponsored by!
posted by Jeff Magnus on August 5, 2010

Government employees are less able to protect us than we are to protect ourselves. Government employees(like all humans) act in their own self interest(usually job justification) without a care to the results to us. I doubt that anyone can find ONE thing that ANY government does well. Government should never be trusted with anything important-like money. Even the flight schools that went out of business were more trustworthy that the government that wants to regulate.

AB48 - California Legislature's money grab. Just to quantify what we are talking about here, let's put some numbers on this debacle of adding flight schools to the bureaucracy BPPE. By the way, this is already law.

It will cost $5000 to register, $3000 per other location, $1000 per location annual renewal fee, $3500 five year renewal fee, and just to add to the pain, all facilities must also pay an annual fee equal to” three-quarters of 1 percent of the institution’s annual revenues derived from students in California, but not exceeding a total of twenty-five thousand dollars ($25,000) annually!

Sorry Russ, you are wrong about this. What we have here is an attempt to fund a bureaucracy whether we need it or not. This action was a result of 15-30 people being swindled. The hell with the rest of the state.

I invite all to visit our web site www.calpilots.org and read about it (perform a search on AB48). Also, please read the article on how laws are made in California which was written by the San Jose Mercury News. It is eye opening.

I might also add that the state receives $250,000,000 in taxes from aviation annually (this includes airline fuel tax). Less than 5% goes back to fund the airports. 72% goes to local government and schools by law, another 23% goes to the black hole called the general fund never accounted for or seen again.

California is a leader in many areas, but it should be embarrassed the way it treats aviation.

I ONLY support regulation of schools that take advance payments. The State of CA should write a bill that regulates pre-payment for services. That protects students from abuse while allowing our local flight instructors to continue low cost, low overhead operations.

Langa Air, at Alton, Illinois airport (Greater St. Louis) took a lot of students for a ride a couple of years ago. Some had borrowed money, paid them up front and never made the first flight. They were also taking the kids money a couple days before they closed the doors. These people who take the money knowing they are going to close the doors in a couple of days are nothing more than crooks. It is not uncommon to pay tuition up front, especially to an "approved" learning institution. I think a Surety Bond would be the answer. In Langa's case, a surety bond requirement would have given some good protection.

After a long session at the California State Senate Building AB1140 (our fix-it bill) was out and ended in the suspense file pending another session next Monday 16, August. Tabling AB1140 means that there was no stay of execution on AB48. California’s nine thousand six hundred eleven CFIs and several hundred flight schools are out of compliance at this time. If we don’t pay the fees we cannot legally work. That is it! Arizona here I come, maybe.

The glitch is that proponents of AB1889 want to combine the bill with AB1140. Not good for us. AB1140 and AB1889 should not be allowed to be combined as the California Governor may veto AB1889 for unrelated reasons putting us out of business while out of compliance and subject to the various fees and yet to be determined fines.
On the other hand, should AB1140 pass as is, it will hold until June 2011 allowing only 10 months to block AB48, California’s cluster-burst.

We have gotten very near success but no joy. I going to bed now but my thoughts are on nine thousand six hundred eleven CFIs and hundreds of flight schools now out of compliance and out of work. Is the sky falling? It is in the California airspace. Good night y’all!

The reality is that Ca considers ALL flight instruction to be Postsecondary Education and is to be regulated. The Legislature DOES NOT distinguish between Part 61 or141. Assume for a minute that those of you who do NOT believe AB 48 will pertain to Part 61 or independents. What is the harm in supporting Ab 1140 to get the delay—NONE. Versus, if you are wrong, and do NOT support AB 1140, we are all hosed, we never get the chance to influence legislation and get a workable solution. Remember, the first priority is to gain the delay, regardless of our point of view. Then we can try to achieve a workable solution. Remember, after the Nov elections, we will not know the composition of the new legislature, and no work will get done until Jan. That leaves us 6 months to develop a stance and introduce urgency legislation that can pass a 2/3 majority vote. The hard work is still ahead, but we go NOWHERE unless AB 1140 passes the Appropriations Committee vote next Monday and the floor vote after that.

Aug 26 meeting of the Arizona Board of Postsecondary Education took up the issue of regulating Part 61 schools "Item VII.A. Question of Regulation of Certain Classifications of Airplane pilot and Instructors under Part 61 of the CFR". I'm trying to get a copy of the minutes, if any attended, please comment. Also, if anyone attended the AOPA town hall meeting in San Diego this past Saturday, please comment.

Aug 26 meeting of the Arizona Board of Postsecondary Education took up the issue of regulating Part 61 schools "Item VII.A. Question of Regulation of Certain Classifications of Airplane pilot and Instructors under Part 61 of the CFR". I'm trying to get a copy of the minutes, if any attended, please comment. Also, if anyone attended the AOPA town hall meeting in San Diego this past Saturday, please comment.

The Arizona law is already in place and part 61 flight schools are not exempt from Arizona regulation.

This is because the FAA does not approve, certify or even register part 61 flight schools.

Meanwhile, while this Arizona law has been in place, it was not being enforced. Hundreds of Arizona flight school students have lost millions of dollars to Arizona flight schools that have just taken the student's money and have not provided the contracted flight training. Unfortunately this has been going on for decades in Arizona.

Why? Because Arizona thought the FAA was approving and certifying Part 61 flight schools. Arizona did not understand that Part 61 flight schools do not even register with the FAA. They actually thought Part 61 flight schools were Part 141 flight schools.

In fact the FAA does not have a list of Part 61 flight schools.

Over 22 million dollars has been lost by flight school students in Arizona over the past 4 years and no student has been refunded and no one has gone to jail for taking the money.

Most of this money was lost in a Part 61 flight school while students were training for a career in aviation.

The FAA has made it clear that it is not their job to protect student's tuition. They are not going to regulate, certify or enforce that part of the business.

If you want to fix this "storm" then the first step is to find a solid way to protect student flight school tuition.

I did not know that the AZ law was already in effect, and the statistics about school defaults are alarming. What you say is true. The problem is not the Part 141 schools who are established, well regulated and have a track record. Likewise, the problem is not the independent instructors, or even the Part 61 schools who operate on a pay-as-you-go basis. The root of this evil is the Part 61 schools who are not able to qualify for a Part 141 certificate, yet who take payment of tuition up-front-then default. CA and AZ are indeed justified in seeking consumer protections, but most of us have been denied due process in developing a workable remedy. We just want a voice to help craft a solution that affects all of us.